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Fibre: Finish the Job

Hamish MacEwan, Guest Post. 07 November 2018, 8:12 am
Fibre: Finish the Job

How much simpler, cost-efficient and effective would the services and support you deliver to New Zealand households be if you could assume fibre availability the way you assume roads, electricity and copper landline telephony?

What would happen to New Zealand if there were no urban/rural divide in communications capability, if a basic 100/20 Mbit/s is available, wherever fibre is, at $46/month. What if work from home, for any employer on the globe, was available in our most distant and suffering regions.

Sports coverage, banking services, education, health and aged care and other services could achieve economies of scale over fibre while permanent bricks and mortar provision is shrinking.

Is 100% an unachievable aspirational goal? Perhaps. We have government to achieve what decision making by spreadsheet can't. Maybe 100% is too big an ask but we could at least do as well as previous generations in ensuring the same equity of connection for roading, electricity and landline telephony, none of which left 16% of New Zealanders to eke out an existence without these essential services.

There are economists who say this is possible. What is certain is that line companies have laid copper and carried generators' power further than Local Fibre Companies (LFCs) can carry other companies' light, and made good livings from it. Good enough to invest in wineries as a diversification.

While the 84% fibre footprint planned by 2022 was a risk in 2011, it is a triumph in 2018 with recent results showing one in three connections are now fibre. The business case assumptions from seven years ago have been well exceeded and the value to New Zealand of fibre connection is recognised.

The original conception of the UFB Project was an open access fibre network. This requirement was forborne due to the risk it would "impose significant costs and over-burden infant businesses investing in emerging technologies."

The active, bitstream product was given exclusively to the LFCs as a buttress against failure, an additional push during the early stages of the project.

Any need for exclusive grants to LFCs, who have all exceeded their business plan targets, has gone. Nevertheless the Telecommunications (New Regulatory Framework) Amendment Bill continues the forbearance on the open access regime.

While the bill is still in flux (improvements have been proposed in a SOP) there is time. We need to take the steps to make fibre a universal essential service. Fibre is one of the cheapest passive infrastructures, with the capacity to deliver an exceptional number of valuable diverse services.

Laying additional fibre is an economic development activity with exceptional returns, but not to the LFC. Their benefit is reliability and certainty of return. The exceptional gain is to the nation and will be reaped by us collectively. Happier people, lowered costs and increased economic activity all follow fibre's universal path.

We need regulation only in the laying, pricing, ROI and access to fibre. Competition at the active layer, bitstreams, will ensure efficient operation and the layer of RSP will provide the diversity of customer services of varying capabilities to serve the wide range of needs a modern information society and economy requires.

Persisting with the integration of passive and active layers exclusively in the hands of the LFCs, covered by a wholesale figleaf of RSPs will not deliver the optimum outcome for NZ. Open access will give a range of risk profiles and returns for investors, competition will drive out excessive margin, and retail will offer citizens a range of services at divide reducing prices and locations.

We've done better in the past, when the rewards were smaller. Let's get on and finish the job for all New Zealanders. Fibre, 100%.


Hamish is a long-standing ICT commentator, advocate for open access and former InternetNZ councillor. He is based in Wellington and can be reached on Twitter here.


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